Colleges and universities will have 25 percent of funding based on performance in Senate budget, Sen. Givens says

FRANKFORT — Public colleges and universities could see a quarter of their baseline funding based on multiple performance indicators in the second year of the Senate’s biennial budget proposal.

Senate President Pro Tem David Givens, R-Greensburg, presented the upper chamber’s performance-based funding model to the Senate Appropriations and Revenue Committee on Tuesday.

It calls for schools to be grouped into three separate sectors: the universities of Kentucky and Louisville in one, all 16 Kentucky Community and Technical College System institutions into another and the remaining schools except Kentucky State University in a third category.

KSU was exempt from the Senate’s plan because of significant challenges faced by the state’s only public historically black institution, Givens said.

Schools would be graded based on degrees or certificates conferred, retention rates, student progression, graduation rates, shrinking achievement gaps and sector-specific metrics, he said, noting that 32 states have implemented some type of outcomes-based financing model and another five soon will be joining them. Institutions would then be ranked in their respective categories, with the top achievers taking 100 percent of their performance-based dollars and others earning less accordingly.

Degrees in areas of science, technology, engineering, mathematics and health would be valued more than those earned in other studies, Givens said.

“Whoever’s shown the best performance for the budget period we’ve described would get 100 percent of their allocation,” Givens said. “The other members in that sector would get a percentage relative to that 100 percent.”

Some on the Senate’s budget panel complained that the proposal could harm sections of the state’s non-traditional student body as schools look to earn as many performance-based dollars as possible.

“I do fear that the non-conventional workforce that we try to send is going to maybe fall and be a detriment to some of these institutions and the enrollment policies will continue to be prohibitive for them, so that is my fear,” said Sen. Robin Webb, D-Grayson.

Givens said the Senate’s budget language would allow Gov. Matt Bevin to fully fund an institution based on recommendations by CPE.

Bevin’s original budget called for a third of public higher education dollars to be issued based on performance, envisioning a transition to 100 percent outcomes-based funding over three years starting in fiscal year 2018.

He said he did not envision a scenario in which schools fall behind because they hit their goals but do not receive 100 percent of their outcomes-based funding because they’re not the top-performing institutions in their respective sectors.

Turning to KSU, Givens said there was some debate about keeping the Frankfort university in the mix for performance-based funding because its gains could outpace other competitors schools.

“I truly think of any institution that could excel and move against their baseline the fastest, KSU could be that institution,” Givens told reporters after the meeting.

“So if you had a perpetually poor performer, I could argue that that institution should have more latitude to move quicker than anybody else simply because the bar is so low for them. It is truly a self-refining sort of process. As you set the bar higher, then you’ve got to set it higher each time.”

He declined to say whether KSU would be spared from higher education cuts in the Senate’s version of the two-year spending plan. Bevin called for 4.5 percent spending reductions in the current fiscal year and 9 percent over the biennium for postsecondary education. Those cuts were restored in the House’s version of the two-year spending proposal.

“The beauty of this model is it will overlay any funding amount we decide to do,” Givens said. “I think you’ll get answers to those questions tomorrow.”

House Speaker Greg Stumbo, D-Prestonsburg, said he had not been briefed on the Senate’s performance-based funding proposal, but he noted that the House’s budget included language to study outcomes-based financing for the state’s higher education programs.

“I believe it has merit and I think others believe it has merit, so we’ll take a look at the Senate plan,” Stumbo told reporters Tuesday. “It sounds like they’ve done some research and gotten some information about what other states have done. This is happening in a lot of states across the nation, so it’s not like we’re reinventing the wheel.”

When asked about the Senate’s call for 25 percent performance-based funding for higher education, Stumbo said that proposal “doesn’t seem to me at first blush to be unreasonable,” but he and House Democratic leaders will review the proposal once the Senate completes its version of the budget.

The Senate budget committee has scheduled a special meeting for noon Wednesday ahead of a likely floor vote on the biennial spending plan that day.

Givens’ presentation was part of a broader discussion on the House’s proposed budget in House Bill 303.

John Chilton, Bevin’s state budget director, reviewed a number of the administration’s concerns with the House’s version of HB 303, such as cutting $12 million for heroin addiction efforts, lowering inmate estimates while providing direction on moving prisoners to private facilities if the prison population increases, a $4 million unfunded mandate to design jails in Oldham, Rowan, Laurel and Knox counties, and a $4 million unfunded mandate to transition Operation Unite from coal-severance dollars to the Justice and Public Safety Cabinet’s budget.

While the House’s budget includes less debt than originally proposed, it also lifts limitations on universities looking to bond projects, Chilton said.

“Currently universities are required to get legislative authorization for projects exceeding ($600,000),” he said. “I heard discussion early on in the budget process about raising that limit from ($600,000) to $1 million or maybe $2 million, but the House’s version releases all restrictions on university debt for the next two years.”

Kevin Wheatley

Kevin Wheatley is a reporter for Pure Politics. He joined cn|2 in September 2014 after five years at The State Journal in Frankfort, where he covered Kentucky government and politics. You can reach him at kevin.wheatley@charter.com or 502-792-1135 and follow him on Twitter at @KWheatley_cn2.